Williams F1

Just one more year: Why Red Bull are obsessed with controlling engine spend

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Todt reforms require unanimous consensus

As we know, the old structure of Technical and Sporting Working Groups proposing rules through a 70 per cent majority for ratification by a 26-man F1 Commission is being revamped.

Autosport reports that instead, a 18-strong ‘Strategy Working Group’ is being created – which will be made up of six team representatives (Ferrari, McLaren, Red Bull, Mercedes, Williams and the next best in the constructors’), six FIA representatives and six representatives from Formula One Management.

This group will vote on rule changes that will be decided through a simple majority, and these will then be passed on to a trimmed 18-man F1 Commission.

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Quinghua in? Fernandes to step down? Austin Sherrifs unconcerned, Marko slates Webber, FIA needs $40m more, France GP – AGAIN!!! Turkey more likely in 2013, Wolff speaks about Senna,

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Marko critical of Webber: Our favourite German newspaper Bilde.de tells us today that Dr. Helmut Marko has pointed the finger at Mark Webber, after the Australian’s messy race in Abu Dhabi. at thejudge13 we think Webber was lucky not to be penalised for his move on Maldonado and his clash with Massa. After the race Webber himself admitted he should have stayed clear of the dueling Perez, DiResta and Grosjean and by not doing so ended his own race when he was too close to avoid the inevitable crash when it occurred.

Marco, not known for mincing his words says, “You can’t have more errors than that in one race. That was not a good day for him.” As if that’s not enough, Marco wants to make his opinion crystal clear telling us, “The start was no good, and the accidents were not good. It’s too bad, because it affects us in the constructors’ championship.” This is a slightly dramatic conclusion from Helmut as Red Bull will inevitably collect the 5 points they require to win the constructor’s title for the 3rd successive year.

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Why Sauber will fall back in 2013

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Not a lot to choose between them

The mid table teams can yo-yo around quite a lot, and I’ve heard many F1 drivers in retirement rue various decisions made to switch teams. Last year Force India finished the season on 69 points and Sauber with just over half as many points on 44. Here is the final table for 2011 and where we are in 2012 right now.

Final Table 2011 3 races to go 2012
1 Red Bull 650 1 Red Bull 407
2 McLaren 497 2 Ferrari 316
3 Ferrari 3
75		 3 McLaren 306
4 Mercedes 165 4 Lotus 263
5 Lotus 73 5 Mercedes 136
6 Force India 69 6 Sauber 116
7 Sauber 44 7 Force India 93
8 Torro Rosso 41 8 Williams 59
9 Williams 5 9 Torro Rosso 21

Quite an interesting read. Although the season is not yet finished there could be a switch between McLaren and Ferrari, but based on the past several races it’s unlikely the others will change. Having said that Mercedes are not developing the car at all and given a couple of very strong results from Sauber they could yet overtake them.

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Resource Restriction ‘Agreement’ – You’ve got to be joking

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Try and find the RRA?

What is the Resource Restriction Agreement (RRA)? Try Googling it, try searching the mainstream F1 media sites, try Wikipedia, try even asking senior team F1 personnel. There’s plenty of articles to be found where F1 people are for it, against it and mostly there is an agreement that costs should be controlled. Yet there is nothing out there that defines the scope of the RRA.

Formula 1 has in the past been most profligate in the area of spending. Rumours have it that Ferrari in their dominant era were spending $100m a year on tyres that were bullet proof. Honda allegedly spent $1bn during 2008 on the present car and the design of the 2009 car. Ironically following Honda’s last minute withdrawal from the sport at the end of 2008, the car they had designed for 2009 won both WDC and WCC titles under the badge of Brawn GP.

At the other end of the spectrum teams have regularly run out of money and ceased to exist and even more that sell out and change their names due to funding problems. In the last 10 years alone, these teams have gone from the Sport: Jordan, BAR, Renault, Jaguar, Arrows, Minardi, Toyota, Honda, BMW-Sauber, Midland, Super Aguri, Spyker, Brawn and Virgin. So the casualty rate is high, and its mostly to do with a lack of funding.

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BIC promoters only expecting half a crowd, Kingfisher employees to disrupt F1, Discord not Concorde in Paris, 1st Lap of COTA more F1 News

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FIA meeting today: Press release 18:05 GMT – “During a constructive meeting, Jean Todt, the FIA President, in co-operation with Bernie Ecclestone, the Commercial Rights Holder, has presented to all F1 Team Principals the new structure of governance, including the new conditions of entry for the Concorde Agreement, starting in 2013. All the participants in the meeting were encouraged to seek clarification which resulted in a fruitful and helpful debate on how the new structure would operate in 2013 and beyond. A further important step has been achieved today to secure the future of the F1 World Championship which should lead to a final settlement to be reached between the FIA, the Commercial Rights Holder and the Teams in the coming weeks. (FIA.com)

On the agenda. The FIA is insisting on only 6 teams, Ferrari, Red Bull, McLaren, Mercedes, Williams and Lotus to be part of the F1 Commision going forward. There were clarifications requested by the teams on the definition of customer cars and particularly the provision of 2014 engines. Renault has refused to increase the number of customers it supplies engines and with Cosworth up for sale this leaves Marrusia and HRT possibly without engines. Renault are objecting to the lack of competitiveness of these teams car designs, saying it is bad for their brand. A solution mooted is for them to buy a customer car from a larger team and then have an engine supplied.

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Force India: How the tower of cards could collapse

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Over the past few days I’ve been asked many times and seen people enquiring on various F1 websites as to how much is an F1 team worth. Of course the answer is simple, different teams are worth vastly different amounts. An F1 team is a business venture – registered with a legal identity independent of any rich owner and subject to the business regulations from the statutory authority where they are registered.

 Valuing a business

The way business ventures are valued is highly complex and sector/performance specific. There was old 3 times profit rule that was a fundamental when I studied Finance many years ago. Yet even this most simplistic valuation methodology is fraught with danger when you dig deeper. Is that profit before or after asset depreciation, asset goodwill, taxation, one off accounting entries of substance – I could go on..and on..and on…

I guess my favourite methodology which can be proved beyond doubt and its an old adage, which says “The value of something is best measured by how much someone is actually prepared to.”

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